Ethics CIMP questions with answers.
Which is an example of an activity that may be legal but that CFA Institute considers unethical?
A. Making legally required disclosures in marketing materials
B. Trading while in possession of material nonpublic information
C. Disclosure by an employee of his or her own company's dishonest activity ANS -B
Q. An ethical decision-making framework will mostlikely:
A. include a pre-determined, uniform sequence.
B. focus exclusively on confirmable facts and relationships.
C. help avoid a decision that has unanticipated ethical consequences. ANS -C
Q. High ethical standards are distinguishing features of which of the following bodies?
A. Craft guilds
B. Trade bodies
C. Professional bodies ANS -c
Q. Fiduciary duty is a standard most likely to be upheld by members of a(n):
A. employer.
B. profession.
C. not-for-profit body. ANS -B
Q. To maintain trust, the investment management profession must be interdependent with:
A. regulators.
B. employers.
C. investment firms. ANS -C
Q. When an ethical dilemma occurs, an investment professional should most likely first raise the issue
with a:
,A. mentor outside the firm.
B. professional body's hotline.
C. senior individual in the firm. ANS -C
Q. The Standards of Practice Handbook provides guidance:
A. regarding the penalties incurred as a result of ethical violations.
B. to which all CFA Institute members and candidates must adhere.
C. through explanatory material and examples intended to be all inclusive. ANS -B
Q. Which of the following statements best describes an aspect of the Professional Conduct Program
process?
A. Inquiries are not initiated in response to information provided by the media.
B. Investigations result in Disciplinary Review Committee panels for each case.
C. Investigations may include requesting a written explanation from the member or candidate. ANS -C
Q. A current Code of Ethics principle reads in full, "Promote the integrity:
A. and viability of the global capital markets."
B. of and uphold the rules governing capital markets."
C. and viability of the global capital markets for the ultimate benefit of society." ANS -C
Q. As stated in the revised 11th edition, the Standards of Professional Conduct:
A. require supervisors to focus on the detection and prevention of violations.
B. adopt separate ethical considerations for programs such as CIPM and Investment Foundations.
C. address the risks and limitations of recommendations being made to clients. ANS -C
Q. According to the Code of Ethics, members of CFA Institute and candidates for the CFA designation
must:
A. maintain their professional competence to exercise independent professional judgment.
B. place the integrity of the investment profession and the interests of clients above their own personal
interests.
, C. practice in a professional and ethical manner with the public, clients, and others in the global capital
markets. ANS -B
Q. Which of the following statements best describes an aspect of the Standards of Professional
Conduct? Members and candidates are required to:
A. ensure any portfolio mandate followed is fair, accurate, and complete.
B. promptly disclose changes that might materially affect investment processes.
C. have a reasonable and adequate basis for decisions about client confidentiality. ANS -B
Q. Which of the following categories completely represents an ethical principle of CFA Institute as
outlined in the Standards of Practice Handbook?
A. Individual professionalism
B. Responsibilities to clients and employers
C. Ethics involved in investment analysis and recommendations ANS -A
Q. A CFA Institute member would violate the standard for material nonpublic information by:
A. conducting price distortion practices.
B. inappropriately causing others to act.
C. inadequately maintaining investment records. ANS -B
Q. According to the Duties to Clients standard, suitability requires members and candidates in an
advisory relationship with a client to:
A. place their clients' interests before their own interests.
B. consider investments in the context of the client's total portfolio.
C. not knowingly make misrepresentations relating to recommendations. ANS -B
Q. As part of the Duties to Clients standard, members and candidates must:
A. document client financial constraints after an initial investment action.
B. maintain an equal balance of interests owed to their clients and employers.
C. deal fairly and objectively with all clients when engaging in professional activities. ANS -C
Which is an example of an activity that may be legal but that CFA Institute considers unethical?
A. Making legally required disclosures in marketing materials
B. Trading while in possession of material nonpublic information
C. Disclosure by an employee of his or her own company's dishonest activity ANS -B
Q. An ethical decision-making framework will mostlikely:
A. include a pre-determined, uniform sequence.
B. focus exclusively on confirmable facts and relationships.
C. help avoid a decision that has unanticipated ethical consequences. ANS -C
Q. High ethical standards are distinguishing features of which of the following bodies?
A. Craft guilds
B. Trade bodies
C. Professional bodies ANS -c
Q. Fiduciary duty is a standard most likely to be upheld by members of a(n):
A. employer.
B. profession.
C. not-for-profit body. ANS -B
Q. To maintain trust, the investment management profession must be interdependent with:
A. regulators.
B. employers.
C. investment firms. ANS -C
Q. When an ethical dilemma occurs, an investment professional should most likely first raise the issue
with a:
,A. mentor outside the firm.
B. professional body's hotline.
C. senior individual in the firm. ANS -C
Q. The Standards of Practice Handbook provides guidance:
A. regarding the penalties incurred as a result of ethical violations.
B. to which all CFA Institute members and candidates must adhere.
C. through explanatory material and examples intended to be all inclusive. ANS -B
Q. Which of the following statements best describes an aspect of the Professional Conduct Program
process?
A. Inquiries are not initiated in response to information provided by the media.
B. Investigations result in Disciplinary Review Committee panels for each case.
C. Investigations may include requesting a written explanation from the member or candidate. ANS -C
Q. A current Code of Ethics principle reads in full, "Promote the integrity:
A. and viability of the global capital markets."
B. of and uphold the rules governing capital markets."
C. and viability of the global capital markets for the ultimate benefit of society." ANS -C
Q. As stated in the revised 11th edition, the Standards of Professional Conduct:
A. require supervisors to focus on the detection and prevention of violations.
B. adopt separate ethical considerations for programs such as CIPM and Investment Foundations.
C. address the risks and limitations of recommendations being made to clients. ANS -C
Q. According to the Code of Ethics, members of CFA Institute and candidates for the CFA designation
must:
A. maintain their professional competence to exercise independent professional judgment.
B. place the integrity of the investment profession and the interests of clients above their own personal
interests.
, C. practice in a professional and ethical manner with the public, clients, and others in the global capital
markets. ANS -B
Q. Which of the following statements best describes an aspect of the Standards of Professional
Conduct? Members and candidates are required to:
A. ensure any portfolio mandate followed is fair, accurate, and complete.
B. promptly disclose changes that might materially affect investment processes.
C. have a reasonable and adequate basis for decisions about client confidentiality. ANS -B
Q. Which of the following categories completely represents an ethical principle of CFA Institute as
outlined in the Standards of Practice Handbook?
A. Individual professionalism
B. Responsibilities to clients and employers
C. Ethics involved in investment analysis and recommendations ANS -A
Q. A CFA Institute member would violate the standard for material nonpublic information by:
A. conducting price distortion practices.
B. inappropriately causing others to act.
C. inadequately maintaining investment records. ANS -B
Q. According to the Duties to Clients standard, suitability requires members and candidates in an
advisory relationship with a client to:
A. place their clients' interests before their own interests.
B. consider investments in the context of the client's total portfolio.
C. not knowingly make misrepresentations relating to recommendations. ANS -B
Q. As part of the Duties to Clients standard, members and candidates must:
A. document client financial constraints after an initial investment action.
B. maintain an equal balance of interests owed to their clients and employers.
C. deal fairly and objectively with all clients when engaging in professional activities. ANS -C
